Canada’s social programs will suffer under balanced budget law

The Toronto Star by Kara Santokie 11 April 2015

With a federal election on the horizon, we’re now getting a peak at some of the goodies upcoming in the budget. Higher TFSA limits? Income-splitting for families? The prospect of a balanced budget law? “Yes, please!” we may be tempted to say.

Add to that a new report that ranks Canada 6th out of 133 countries in the annual Social Progress Index, the highest in the G7, and we might very well make our way toward the ballot box quite smugly, with our seemingly heavier pocketbooks in hand.

Not so fast.

We can’t forget that our spending decisions reflect our social commitments. Balanced budget legislation would automatically freeze program spending and cut cabinet ministers’ salaries in times of deficit, except in “extraordinary circumstances” such as war and economic recession. Balancing the budget should rightly be a government priority, but it’s equally important to carefully consider how we get there and how Canadians are affected.

In the past seven years, policy design appears to have been based on an assumption that reducing the federal deficit and implementing social policy that improves Canadians’ well-being are mutually exclusive goals. At the same time, the spending decisions of traditional “high politics” — foreign policy and defence — seem to be orchestrated in a vacuum. The partial projected cost of military involvement in Syria was released after the House of Commons vote ($528 million at last check), and significant portions of both the Iraq/Syria and NATO Eastern European mission costs will remain classified in the upcoming budget. In other words, the Canadian taxpayer will never know.

What we do know, meanwhile, is what we’re not spending on.

The pressing issue of missing and murdered aboriginal women, for instance, continues to suffer from scant consideration and bare-bones funding. In 2006, the government cut funding to aboriginal organizations addressing this issue, and largely redirected its promised $5 million annual funding to the RCMP’s missing persons database, which is not dedicated to tracking aboriginal women and girls. There are no plans to increase resources and no word of funding for wider initiatives to empower aboriginal women and improve their lives.

Many women’s organizations also suffered cuts. Nationally, Status of Women Canada’s budget was cut by 37 per cent in 2006 and 12 of its 16 regional offices subsequently closed. This has been steadily declining ever since, coming in at one-hundredth of 1 per cent of total federal spending in 2014.

Families, the purported focus of the government’s economic policies, haven’t fared much better. Measures that would truly benefit those families who need it the most are sadly lacking. The government’s own Parliamentary Budget Officer has concluded that income-splitting will be of little benefit to the majority of middle- and low-income families, while costing $2.2 billion in lost revenue. Similarly, both the PBO and think-tanks point out the regressive nature of proposed increased TFSA contributions. That policy will benefit wealthy people while the majority of Canadians will be affected by the cuts to social programs or increased taxes needed to offset the projected billions in lost federal and provincial revenue in the coming years – especially if the government goes ahead with its planned balanced budget law.

Meanwhile, incomprehensibly, initiatives that would ultimately increase Canada’s GDP and help to balance the budget, such as a national child-care program, are steadfastly ignored. This has long been our perverse direction. Crucial forms of social spending that contribute to the economic productivity and well-being of Canadians, such as housing and transportation, are increasingly either cut or downloaded onto the provinces or both in order to balance.

Government policy should ultimately enable all Canadians to lead productive and meaningful lives, and this can’t be accomplished by measures that cherry-pick beneficiaries or come at the expense of many. What may seem like goodies in the upcoming budget are really just more of the unsustainable same.